INTERVIEW OF THE MONTH
INTERVIEW WITH MR. VIJAY SAMUEL,
GBS Lead – ESAB
How do you believe shared services of the future will look like? What will they deliver beyond providing a fixed portfolio of scale services?
Less business structure and more business systems will be the standard for shared services organizations of the future. SSOs will have collaborative coalitions of employees, business managers, technology professionals, suppliers, vendors, government officials and customers—all focused on the same goals. As the focus turns to systems rather than structures, new approaches to shared services will emerge such as –
- Activities will no longer be owned by the functional group or controlled by a single offshore BPO provider; instead, coalitions of people and services will work across global business units. Talented shared-services professionals will become internal consultants—best-of-breed thinkers—capable of challenging the status quo by drawing on a wide range of experiences. Questions of onshore, offshore and nearshore will become irrelevant.
- Similarly, process-level decisions will be less important as more emphasis will be placed on the effectiveness of the participants, rather than the efficiency of delivery. This is because advances in technology and the maturity of outsourced partners will make process improvements more the rule than the exception.
- Incorporating cultural context into traditional make-versus-buy analyses will encourage new perspectives from coalition partners, leading to successful partnerships and game-changing performance. Technology will free executives from day-to-day tasks, allowing them to focus on value-added activities such as developing products and markets, sales strategies and improving customer service and satisfaction.
- The focus will also be on taking on adaptive strategies. For example, the SSO could manage business continuity and disaster recovery, using its ability to source and manage disparate activities around the globe to maintain up-time requirements while there is a focus on developing a recruiting and training function that rotates talent, including external partners, throughout the system.
- Disruptors, such as artificial intelligence (AI), automation, and digitization will be impacting the future of work; supporting both Internal/External customers, the types of services provided, and the workforce needed to enable the ongoing operations. These digital disruptors will be enabling the rapid transformation of traditional shared services from transactional processing to higher-value, knowledge-based business and advisory services.
The types of services SSOs have been offering so far are expanding to include not only the typical transactional processes but also – True end-to-end services such as procure-to-pay, more cutting-edge services around big data analytics & social media and finally Customer-facing and competency-based processes, such as vendor management. New generation SSOs will be supporting both the internally-provided functions and the business process outsourcing relationships of sourced functions as the future of work will involve creating the opportunity to use new tools to optimize performance, improve data management, reduce costs, and provide additional services and support that improve the overall customer/End-Users experience.
What are shared service organizations doing to deliver game changing performance from their shared services? Is there any change in terms of preparedness that you’re seeing now versus say five years back?
- Incremental change to the SSO operating model as the evolving SSOs are focussing on becoming more flexible, collaborative and technologically astute with adaptive business systems that deliver game-changing performance. The evolving SSO’s are now focussing on solutions that will seek new labour pools, reengineering end-to-end processes and eliminating non-value work which must be understood within the context of a larger business system; one that is dynamic, self-sustaining, flexible, and balances supply and demand with each function within this adaptive business system, on its own and in concert with others, that can adjust quickly to change in order to maintain competitive advantage and sustain the system’s value.
- Five years ago, SSOs were perceived mainly as transactions processing organizations but now, shared services centers have taken on more prominence and are perceived as a strategic part of the business – a value provider, with metrics, analytics, trends and insightful business intelligence to provide to customers/End Users. In terms of preparedness, shared-services groups in most companies are preparing for a full-scale shift to digital ways of working as they’ve started to build the digital capabilities required to improve internal processes, interact with customers and partners more efficiently, and create innovative products and services to reduce costs and optimize performance.
How do you believe digital has enabled shared service organizations to deliver improved business impact? Could you please detail with some examples?
In the traditional “low-cost” mindset, SSCs primarily supported organizations’ cost-saving initiatives, for example by centralizing business functions, standardizing processes and implementing a single ERP system, applying Lean/Six Sigma and offshoring. To navigate these shifts, technological mastery was crucial as rather than incrementally improving the services provided by just looking at single-point digital solutions (“doing digital), SSCs are now taking a more holistic view of digitization which could mean digitally redefining customer-centric end-to-end processes and, within these processes, identifying the repetitive, rules-based activities and readily available datasets at customer touchpoints. In Everest Group’s report, “Digital Maturity in GIC – Pinnacle Model Analysis” we identified the characteristics of what we refer to as “Pinnacle GICs”™ – global shared services centers that stand apart from other GICs for their business outcomes and capability maturity. Pinnacle GICs achieve superior business outcomes because of their advanced capabilities and we reference these best-of-the-best GICs to provide insights into key enablers for desired outcomes and investments required for the greatest speed to impact and let’s have a look at various statistics for example:
- 68% of the pinnacle GICs generated significant strategic impact compared to only 37% of the other GICs. We define “significant” as high to very high impact on strategic areas. For example, 73% of Pinnacle GICs reduced their cost of innovation compared to only 40% of other GICs achieving this.
- 46% decreased their time to market compared to only 26% of the other GICS. And consider the outcomes for improving customer experience – the Holy Grail of digital transformation activities: 73% of Pinnacle GICs achieved this outcome compared to only 49% of the other GICs.
- Pinnacle GICs also delivered twice as much revenue growth impact for their parent organizations through digital initiatives compared to other GICs. They accomplished these outcomes and more return on their investment (ROI) from digital initiatives in only 15 months compared to 17 months for other GICs.
- Enabled by digital technologies, these companies also achieved significant cost and operational impacts. Pinnacle GICs generated 28% average cost savings from digital initiatives compared to only 8% for other GICs. They achieved 46% improvement in operational metrics compared to 19% by other GICs including – 50% increase in process accuracy (compared to 21% of other GICs) & 35% improvement in staff productivity (compared to 16% of the others)
- Pinnacle GICs achieve more than twice as much penetration across digital segments than other GICs – 43% in automation compared to 21% of other GICs and 30% in analytics compared to 15% of the others.
How do people within shared services need to be reskilled to get ready for the future? What should enterprises be doing about it?
A recent survey indicated that 58% of SSC leaders agreed that upskilling/reskilling was the highest priority in addressing current talent shortages and they also readily see their existing employee base as the key pool to meet scarce talent requirements in SSCs with a clear roadmap strategy as listed below –
- Ensure Senior leadership backing to ensure adequate resource and profiles are mapped for phased wise realignment within the organization.
- Implementation of a skill-specific talent acquisition strategy to identify both critical areas of shortage and those most suitable for reskilling/upskilling.
- Quick roll-out of pilots in critical areas of shortage to build confidence and to learn and breaking down of functional barriers, giving employees wider exposure to functional roles.
- A combination of effective duration and appropriate method (job rotation, on-the-job training, mentoring, peer-to-peer learning, and specialist external providers).
- Clear communication of career paths, internal opportunity, incentive, and compensation.
- Shared Services/Enterprise Service Providers should consider the four following strategic steps to adapt their workforce to the future of work:
- Create a Long-Term Roadmap – Develop a comprehensive workforce strategy that addresses the work and skill that will be new, displaced, disrupted, and enduring in the future
- Design New Roles – Unlike traditional job redesign, in employee-centered job redesign the workforce plays an integral role in identifying what their jobs could look like in the future. The workforce’s input is critical in understanding what higher-value work they could be doing instead of their routine, repetitive work activities, and workers’ involvement helps them understand that their job is not being eliminated but that it is changing to focus on more strategic, value-add, and human work. Additionally, this supports workforce alignment to activities that employees are interested in and that utilize their strengths, thus achieving a higher-performing workforce.
- Train Workers for New Roles – Staff will be reskilled in essential human skills, such as decision making and influencing others as well as domain knowledge (e.g., accounts payable, human resource benefits), technical skills, and how to work with and optimize the digital technologies that are now part of their work. Many staff that was previously performing transactional activities such as data entry or error research will require new skills for their new work. In addition, the new work and workforce will bring new supervisory roles and managers will need to be trained on basic managerial and leadership skills as well as learn how to manage a blended human-technology workforce. The workforce will require new methods of training that enable them to build their knowledge and skills constantly by supporting the learning needs of the future of work.
- Manage the Staff of the Future – Leaders will need to manage a blended workforce of human and digital workers. Human workers will need to be focused on problem-solving, providing customer support, and performing quality control for the results of digital workers. Additionally, human workers will be needed to apply their knowledge and skills in multiple areas, on a short-term basis, instead of a singular transactional area for an extended period of time. Much of the new work will require essential human skills as workers perform more knowledge-based and customer-facing services.
Could you share some of the transformations that you have undertaken in your current organization Esab ? What business benefit has this yielded?
2020 was certainly a break-through year for the GBS Chennai Team operating at the highest levels, delivering extraordinary outcomes and enabling new/enhanced capabilities as a Digital to effectively meet the Global SSC Engine Model Strategy as a Global Transaction Centre and An Automation/Digital Center of Excellence (CoE) thereby enabling us to move up the maturity curve offering both strategic and value-added services within a unified framework to all our partnering organizations and the rest of the enterprise improving its top-line performance.
- Robotics Process Automation Initiative – RPA journey launched partnering with UiPath through a POC, In-house Pilot and E2E Implementation across Master Data Management process with an overall Savings achieved being 6x ROI in 9 months.
- Workforce Management Solution – Introduced Prohance as a GBS Operations Management Platform with actionable analytics reporting which provided real-time visibility achieving 10x ROI plus annual savings of $7K thru Asset Optimization tracking Inventory usage
- Operationalizing Data Analytics – Setup Enterprise Analytics Services providing Operational Insights, Realtime data visualizations & standardized dashboards to Finance & Sourcing Org’s
- Data Mining – Engaged Celonis to help us look at our E2E processes across SSC while it can also seamlessly integrate with RPA (UIP) to help identify opportunities to automate upstream while downstream it can also monitor RPA Implementation making sure it is on track.
- BPM & OCR – Introducing OCR (Abby) & BPM solutions to eliminate Paper-based processing and to streamline existing workflow across all processes to ensure increased accuracy, improved SLA/TAT and Incremental productivity savings